Consumer Groups at Odds With Tech Over Serial AI Deals
Tech companies are buying small AI startups without antitrust scrutiny, which could have long-term, negative impacts on consumers, Public Knowledge said Monday in comments to the FTC and DOJ. Tech associations argued empirical evidence shows there aren’t competition concerns in…
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the sector and said antitrust enforcers should rely on statistics, not conjecture. DOJ and the FTC on Friday closed public comment on their inquiry into “serial acquisitions and roll-up strategies” that they believe harm competition. Public Knowledge, in joint comments with the Responsible Online Commerce Coalition, cited the strategic investment of companies like Microsoft, Google and Amazon. Companies in recent years have purchased hundreds of small tech startups, including those offering AI services, and the deals are so small they often don’t trigger antitrust review. “This has allowed Big Tech to shape numerous digital markets and expand their dominance unchallenged,” said PK. Tech companies already enjoy dominant positions in their respective markets, but purchasing AI companies further entrenches their dominance, said PK: “The lack of competition in technology ecosystems can lead to stagnation in innovation and service improvement and presents significant hurdles for consumers seeking to explore different products.” The Computer & Communications Industry Association said in comments that enforcers failed to show “how and why these business strategies raise particular competitive concerns.” The agencies’ annual Hart-Scott-Rodino report for fiscal 2022 showed enforcers don’t identify competition concerns in “most notified mergers.” The agencies requested additional information on 47 of the 3,029 notified merger transactions in the report, or fewer than 2% of the deals, said CCIA. NetChoice urged enforcers to keep their focus on “demonstrable consumer harm rather than abstract structural concerns or protection of competitors.” The association recommended the agencies rely on “grounded analysis in rigorous economic evidence rather than anecdotes or political considerations.”